Kamla Construction Company v. Rajasthan Rajya, District Collector, Bikaner
2023-02-10
ARUN BHANSALI
body2023
DigiLaw.ai
ORDER : 1. This application under Section 10 and 11 of the Arbitration and Conciliation Act, 1996 (‘the Act’) has been filed by the applicant seeking reference of dispute between the parties to Arbitrator. 2. It is inter alia indicated that the applicant was issued a work order dated 1.1.1996 for manufacture and supply of 20 lakh first class bricks and an agreement No.7/1995-1996 was executed in this regard. As per the order and contract, the work was to commence from 16.1.1996 and was to be concluded in 12 months i.e. by 15.1.1997. 3. It is claimed that the applicant earnestly commenced implementation of the work order and supplied 20 lakh bricks by 31.10.1996, however, another order dated 31.10.1996 was issued to the applicant for supply of additional 20 lakh bricks and based on the said quantity, it was expected that the contract would be extended till 15.1.1998. 4. It is then indicated in the application that for various reasons on account of rains etc. instead of 40 lakh bricks, the applicant was required to manufacture 45.50 lakh bricks, however, the applicant was not made full and final payment by the respondents in terms of Clause-10(a) of the agreement. It is claimed that on account of delayed payment, the applicant is entitled for interest on the outstanding payment. 5. It is then indicated that in terms of Clause-19 of the agreement, any question, difference or objection in connection with the agreement was to be referred to a sole arbitrator to be appointed as per the procedure prescribed, based on which, the applicant issued a notice dated 5.3.2020, however, as the respondents have not followed the procedure prescribed under Clause-19, they have lost the right to appoint arbitrator and, therefore, a sole arbitrator be appointed. 6. A reply to the application has been filed by the respondents inter alia with the submissions that the petitioner did not complete the work in the stipulated time period i.e. 31.3.1997 and there was a delay of more than a year in execution of the work order and, therefore, the petitioner is not entitled to any relief. 7. Further submissions have been made that the applicant was lying in the state of slumber as the dispute pertains to the year 1998 and the present application has been filed in 2020 after issuing notice.
7. Further submissions have been made that the applicant was lying in the state of slumber as the dispute pertains to the year 1998 and the present application has been filed in 2020 after issuing notice. The claim made is ex-facie barred by limitation even as per Article 137 of the Limitation Act, 1963 and, therefore, the application deserves dismissal. 8. No rejoinder to the reply has been filed. 9. Learned counsel for the applicant made submissions that the claim made by the applicant is genuine, wherein, the respondents have not made payment of huge outstanding amount to the applicant and not only this, even the final bill has not been prepared and, therefore, the plea raised pertaining to the claim being barred by limitation has no substance. It was emphasized that as the final bill has not been prepared so far, it cannot be said that the claim is barred by limitation so as to seek dismissal. 10. Further submissions have been made that it is well settled that the issue pertaining to the limitation has to be considered by the arbitrator and this Court while examining the matter under Section 11 of the Act, cannot determine the aspect of limitation. 11. Reference in this regard has been made to judgments in Duro Felguera. S.A. v. Gangavaram Port Limited: (2017) 9 SCC 729 and M/s. Jai Shiv Construction Company v. State of Rajasthan & Ors.: S.B. Arbitration Application No.19/2019, decided on 21.7.2022. 12. Learned counsel for the respondent made submissions that in case where the claim made is ex-facie time barred and it is manifest that there is no subsisting dispute, the Court can refuse to make the reference under Section 11 of the Act. 13. Reliance has been placed on judgment in Bharat Sanchar Nigam Limited & Anr. v. Nortel Networks India Private Limited: (2021) 5 SCC 738 . 14. I have considered the submissions made by learned counsel for the parties and have perused the material available on record. 15. From a bare perusal of the application it is apparent that the applicant has himself claimed that the work pursuant to the work order was completed by the applicant on 18.7.1998.
14. I have considered the submissions made by learned counsel for the parties and have perused the material available on record. 15. From a bare perusal of the application it is apparent that the applicant has himself claimed that the work pursuant to the work order was completed by the applicant on 18.7.1998. For the period subsequent to the year 1998, in para-5 of the application, the applicant has made reference that grand-father and Uncle of the applicant died in the year 2002 and 2010, respectively, the office of the respondent being 400 kms off Bikaner, the applicant could not contact the said office and under Clause-10(a) of the agreement, it was the duty of the respondents to have make the payment. 16. It was thereafter claimed that in the year 2015 applicant’s father / partner suffered paralysis, who was looking after the work and on account of which, his memory became weak and he could not indicate about the record of the klin and thereafter when under Right to Information Act record was received in the year 2019, the applicant became aware of the outstanding from the respondents and, therefore, the application was being made after issuing of notice seeking appointment of arbitrator and failure of the respondent to respond to the said notice. 17. From the above, it is ex-facie clear that between the year 1998 and 2020 i.e. the period when the work under the agreement ended and the notice under Section 11 of the Act was issued, there is no activity and/or attempt on part of the applicant to seek payment of the alleged outstanding and whereafter for the first time on issuing notice under Section 11 of the Act, besides raising various claims, appointment of arbitrator has been sought. 18. The plea raised that as the final bill was not prepared by the respondents, the cause of action did not arise cannot be countenanced in the peculiar circumstances of the case, wherein, for over 22 years, the applicant has chosen to remain silent and/or did not seek enforcement of its alleged dues from the respondent. 19.
18. The plea raised that as the final bill was not prepared by the respondents, the cause of action did not arise cannot be countenanced in the peculiar circumstances of the case, wherein, for over 22 years, the applicant has chosen to remain silent and/or did not seek enforcement of its alleged dues from the respondent. 19. It is not in dispute that the limitation for the purpose of money claim based on non-payment of amount under the agreement is 3 years and in the present case, by no stretch of imagination it can be said that the claim sought to be raised by the applicant in the year 2020, is within limitation. 20. The very fact that the applicant in para-5 of the application as well as in the notice, has made reference to certain deaths in the family and the illness of the partner, necessarily leads to the conclusion that the applicant himself being aware of the huge delay somehow wants to explain the same, which aspect is of no consequence insofar as the claim getting barred by limitation is concerned. 21. It is true that Hon’ble Supreme Court in the case of Duro Felguera. S.A. (supra) inter alia laid down that in an application under Section 11 of the Act, the Court should only look into the existence of the arbitration agreement before making the reference, nothing more, nothing less. However, in the case of Bharat Sanchar Nigam Ltd. (supra), Hon’ble Supreme Court after inter alia referring to judgment in the case of Duro Felguera. S.A. (supra), created a window inter alia holding that in rare and exceptional cases where the claims are ex-facie time barred and it is manifest that there is no subsisting dispute, the Court may refuse to make the reference. 22. In view thereof, as the applicant has admittedly sought reference of the dispute after 22 years, the claim is ex-facie barred by limitation and there apparently was no subsisting dispute between the parties. 23.
22. In view thereof, as the applicant has admittedly sought reference of the dispute after 22 years, the claim is ex-facie barred by limitation and there apparently was no subsisting dispute between the parties. 23. So far as the judgment in the case of Jai Shiv Construction Company (supra) is concerned, in the said case, the respondent State wrote a letter to the applicant that for the balance payment, the information was being sought from the earlier disputes and that the pending bills would be cleared soon, based on which, the Court came to the conclusion that the matter was pending consideration at the hands of respondent and the dispute was not resolved and, therefore, appointed the arbitrator. 24. Qua the said judgment, in SLP (Civil) Diary No.34268/2022, Hon’ble Supreme Court on 14.12.2022, clarified that the question of claim being barred by limitation can also effectively adjudicated by the learned arbitrator. 25. No such letter and/or action on part of the respondent is available in the present case so as to indicate that the dispute has not been resolved/the same is subsisting, as such the said judgment has no application to the facts of the present case. 26. In view of the above discussion, as the claims of the applicant are ex-facie time barred and there is no subsisting dispute, the application is liable to be dismissed and the same is, therefore, dismissed.